S&P 500 (NYSE:SPY) component IBM (NYSE:IBM) will unveil its latest earnings tomorrow, Tuesday, January 22, 2013. IBM creates integrated solutions that leverage information technology and a deep knowledge of business processes for clients.
IBM Earnings Preview Cheat Sheet
Wall St. Earnings Expectations: The average estimate of analysts is for profit of $5.25 per share, a rise of 11.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from $5.27. Between one and three months ago, the average estimate moved down. It has been unchanged at $5.25 during the last month. For the year, analysts are projecting net income of $15.09 per share, a rise of 12.8% from last year.
Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the third quarter, the company reported profit of $3.62 per share versus a mean estimate of net income of $3.62 per share. In the second quarter, the company beat estimates by 9 cents.
Stock Price Performance: Between November 15, 2012 and January 15, 2013, the stock price had risen $6.65 (3.6%), from $185.85 to $192.50. The stock price saw one of its best stretches over the last year between September 4, 2012 and September 17, 2012, when shares rose for 10 straight days, increasing 6.5% (+$12.61) over that span. It saw one of its worst periods between September 17, 2012 and September 26, 2012 when shares fell for eight straight days, dropping 1.5% (-$3.15) over that span.
Analyst Ratings: There are mostly holds on the stock with 11 of 21 analysts surveyed giving that rating.
Wall St. Revenue Expectations: Analysts predict a decline of 1.2% in revenue from the year-earlier quarter to $29.15 billion.
After last quarter’s profit drop broke a string of income increases, this earnings announcement is definitely a chance for a rebound. Net income rose 4.4% in the fourth quarter of the last fiscal year, 7.1% in the first quarter and 5.9% in the second quarter before declining in the third quarter.
On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 3.3% in the second quarter and dropped again in the third quarter.
A Look Back: In the third quarter, profit fell 0.4% to $3.82 billion ($3.33 a share) from $3.84 billion ($3.19 a share) the year earlier, meeting analyst expectations. Revenue fell 5.4% to $24.75 billion from $26.16 billion.
Here’s how IBM traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:
Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.22 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.
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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)
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